Whitebook Builders Profit From Notebook Battery Recall Fallout

With news of the latest recalls breaking last week, system builders and solutions providers say they've continued to see the sales of whitebooks buoy as problems mount.
For the past several weeks, since Round Rock, Texas-based Dell announced on Aug. 15 it was recalling 4.1 million notebook batteries with Sony cells, system builders have said they expected to see benefits from the emergence of fear, uncertainty and doubt surrounding tier-one notebook makers.

The Lenovo recall came little more than a week after reports that a ThinkPad T43 burst into flames at a Los Angeles airport requires a public safety response. Under terms of the recall, which was joined by IBM, Armonk, N.Y.—which sold its PC business to Lenovo last year—several models of ThinkPad notebooks, including those from its T Series, R Series and X Series would have batteries exchanged under Lenovo's replacement program.

The batteries were sold with, or separately for use with, those ThinkPad models sold between February 2005 and September 2006.

"We did confirm the incident at LAX, and we have confirmed that, yes, indeed, it was a Sony battery cell that was included in the notebook," said Ray Gorman, Lenovo's spokesman, just prior to the recall announcement. "Our No. 1 issue here is public safety. We will go forward in the best interests of public safety."

Expert Computers, a solution provider and systems builder based in Erie, Pa., also said his whitebook business is up 15 percent compared with last year. "It's hard to quantify if it's directly related to the battery recall, but a lot of people are bringing in their recalled notebooks," said Tim Klan, president of Expert Computers. "It is a little bit of a selling point."

Despite the involvement of Apple, Lenovo and Toshiba in Sony-related recalls, some in the channel believe Dell has remained a lightning rod for ill will over the issue.

Klan also believes that Dell, the market-share leader, is inadequately handling the battery recall.

"We've had customers waiting two weeks for a replacement. [Dell] wasn't ramped up with the proper stock in hand, and that's made them lose credibility with customers," Klan said. "Anybody can have a product recall, it's a matter of how you handle it."

Glenn Pubal, sales manager at Royal Business Equipment, a solution provider and system builder in Elyria, Ohio, keeps two news photos of exploding Dell notebooks up in his showroom. "I think it's effective. If someone comes in looking for notebooks, I say just look at these pictures," he said. "It's an issue people are aware of."

Royal Business Equipment recently started selling Lenovo ThinkPads, but leads with his own notebooks first, he said.

"We market [Lenovo] as this is the old IBM ThinkPad. People say it's nice, but still nobody's heard of them," Pubal said. "We can get [whitebooks] out the door for less than $900. That extra $100 is justifiable to a lot of people."